Kelly v Rogers [1935] 19 TC 692

• The beneficiary was UK resident but was domiciled in New Jersey. However, she was a person under an incapacity.

  • Trust funds had been established to provide for her maintenance; any balance was to be accumulated.

  • The trustee was the beneficiary’s sister. The trustee, Mrs. Rogers, was married to an Englishman and was UK resident and English domiciled.

• If Miss Wilmer, the beneficiary, had not been incapacitated, she would have been able to claim the benefit of what is now s65TA, the non-UK domiciliary remittance basis.

• However, it was held that as her sister Mrs. Rogers was in actual receipt and control of the income and she was UK resident the whole of the income was assessable to UK income tax on an arising basis.

Shipwright and Baldry

• This does not give any clear theoretical basis for the taxation of trustees.

• See Lord Sands in Reid Trustees:

It was found that the substance of the matter and not any more thereby was to be regarded.

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